Ministry of Commerce and Industry has refused requests for liquidation from 13 companies
A number of construction firms in Kuwait are facing the prospect of declaring bankruptcy due to a lack of liquidity and an inability to meet their financial commitments for completing projects that have been suspended for more than three years, it has been reported.
According to an article published by Al-Shahed Daily, Kuwait’s Ministry of Commerce and Industry (MoCI) has refused requests for liquidation from 13 companies, so as to protect the rights of the shareholders and the funds of small investors.
Citing unnamed sources, the newspaper report said that weak cashflow and administration problems have led to some creditors to ask the ministry to liquidate certain companies because their profit margins have dropped by 80% over the last three years.
The National Bank of Kuwait, in its latest Economic Update, said that the total value of awarded projects in Kuwait fell by 28% to $13.3 billion in 2017, as compared to the year before, and below the five-year average.
Due to delays in the bidding phase in 2017, a number of construction projects have been pushed into 2018, the update added. Furthermore, there were also delays in awarding transport projects in 2017, which could now take place this year.